(A) Breach of contract. Any contractor who has been determined in writing by the City Council to be in breach of any of the terms and conditions of a valid contract (with the city), shall, in the discretion of the Council be declared in default and such contract may be terminated as a result of such breach.
(B) Default of contract. A default in performance by a contractor for which a contract may be terminated shall include, but shall not necessarily be limited to:
(1) Failure to perform contract according to its terms, conditions and specifications;
(2) Failure to make delivery within the time specified or according to a delivery schedule fixed by the contract;
(3) Late payment or nonpayment of bills for labor, materials, supplies, or equipment furnished in connection with a contract for construction services as evidenced by mechanic's liens filed pursuant to the provisions of KRS Chapter 376 or letters of indebtedness received from creditors by the superintendent, or
(4) Failure to diligently prosecute the work under a contract for construction services.
(C) Payment or nonpayment of a terminated contract. The city shall not be liable for any further payment to a contractor under a contract terminated for the contractor's default, after the date of such default as determined by the Council except for commodities, supplies, equipment or services delivered and accepted on or before the date of default and for which payment had not been made as of the date. The contractor, and/or his surety (if a performance or payment bond has been required under the contract) shall be jointly and severally liable to the city for all loss, cost or damage sustained by the city as a result of the contractor's default; provided, however, that a contractor's surety liability shall not exceed the final sum specified in the contractor's bond.
(D) Changes or modifications to contracts. All changes or modifications to contracts for the purchase of commodities, supplies, equipment, and construction services shall be effected by a written modification of the contract which shall be supported by a written determination (by the purchasing official) documenting the reason and basis for the change and modification to the contract. Any change or modification of the contract which involves a cost increase or decrease of 10% of the total contract price or $2,500 whichever is less, shall be submitted to the Council for approval before being implemented. A copy of the advice of change in order and the supporting documentation relative to any change or modification to a contract shall be filed and maintained in the contract file by the Mayor.
(Ord., passed 3-3-80)